[WayneS]

Going to the undergound has two consequences: For those who take out loans, it means having to pay much higher interest rates than they would if they borrowed legitimately. For the lender, it means that if a loan goes unpaid, there isn't much that can be done about it.

Really? I have a sneaking suspicion the Chinese are well versed in the "policies and procedures" of loan-sharking.

[gaijin]

China & the US: more like each other every day.

When do they start harvesting our organs?

[ResponseAbility]

Hu’s Fulin who here?

[forgotten man]

Maybe the bosses went to medical school.

[PGR88]

If its a ¨black bank¨ then presumably it was all local, private money.

As such, I wouldn´t see it as a systemic risk.

[mojito]

China is irrevocably and unfathomably corrupt, and it will be their undoing.

[Dilbert San Diego]

Is China still really communist? The banks give preference to state owned businesses in lending, but are these private banks, or state owned banks?

And how does a communist society tolerate underground banks or gangsters or loan sharks? Just asking the question. It seems that China has some combination of communism with unregulated free markets. And some of those free markets are outside any government control. Which seems a contradiction, in that under communism, theoretically every activity is under state control.

[fso301]

For the lender, it means that if a loan goes unpaid, there isn't much that can be done about it.

True but to a lender, kidneys are worth no more than their market value. However, I suspect borrowers believe the value of their own kidneys to be far greater than the market.

[StormEye]

"He also invested in real estate and the renewable energy industry."

I'm not surprised he's broke.